Justice and corporate strategy: prescriptive decision models involving multiple stakeholders

• Grant number: 20/05969-3
• Support Opportunities: Scholarships in Brazil - Doctorate (Direct)
• Start date: November 01, 2020
• End date: October 31, 2023
• Field of knowledge: Applied Social Sciences - Administration - Business Administration
• Principal Investigator: Sérgio Giovanetti Lazzarini
• Grantee: Vitor de Barros Santos Freire
• Host Institution: Instituto de Ensino e Pesquisa (Insper). São Paulo , SP, Brazil

Abstract

Although stakeholder management theory has originally departed from normative basis the literature evolved base more on an instrumental approach claiming that generating value for multiple stakeholders is consistent with superior organizational performance. In contrast, normative approach emphasizes management for stakeholders based on principles of choice that may not come from performance enhancing motives, which might even entail some financial sacrifice. This project advances the debate by developing a prescriptive approach, i.e., an analysis of merits and limitations of distinct decision models with respect to attributes of the decision context, with specific emphasis in informational limitations faced by decision-makers. For example, a comparison is made between an utilitarian decision model and a social-contractualist that stablish minimum investments in different stakeholders. Based on this theoretical discussion, an empirical study is proposed by an experiment simulating decision-making in a company's board is proposed. Some hypothesis about how the distinct informational attributes may affect choices in the context with multiple stakeholders are derived from the theoretical discussion. In particular, how different opinions in a group of decision-makers may lead to choices that guarantee stakeholders minimum standards of welfare in most adverse situations, even if they imply lower profits in less adverse scenarios (i.e., the maxmin choice rule, similar to the prescription of some socio-contractualist models). Finally, this study aims to propose and test theoretical foundations of decision-making that support prescriptive decision models beyond the instrumental approach prescribing management for stakeholders grounded on performance-enhancing reasoning. (AU)